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Americans today can take more than inspiration from the struggles against plutocracy that progressives waged years ago. They can take a host of still relevant — and cutting-edge — policy proposals.

Our contemporary billionaires, most Americans would agree, are exploiting our labor and polluting our politics. Can we shrink our super rich down to a much less powerful — and more democratic — size? Of course we can. We Americans, after all, have already done that shrinking once before.

Between 1900 and the 1950s, average Americans beat down plutocrats every bit as dominant as ours. A century that began with huge private fortunes and most Americans living in poverty would come to see a mass middle class and sweeping suburban developments where grand estates and mansions once stood.

Most Americans today, unfortunately, have no inkling that this huge transformation ever took place, mainly because that exuberantly middle class America of the mid 20th century has disappeared. Those grand mansions have come back.

Does this super-rich resurgence make failures out of our progressive forebears, the men and women who fought so hard and so long to limit the wealth and power of America’s wealthiest? Our forebears didn’t fail, suggests a new book I’ve just done. They just didn’t go far enough.

In The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, I trace the incredible feats those progressives accomplished over the first half of the 20th century. They “soaked the rich” at tax time. They built a union movement that acted as a real check on corporate arrogance and greed. They even tamed Wall Street.

But these great victories have long since faded. How can we get back on a plutocracy-busting track? We could start by revisiting those struggles of years past that came up short, those proposals that, had they become law, might have more lastingly leveled down our super rich.

The Rich Don’t Always Win explores a host of these proposals. Here’s a sampling of just five.

One: Require the rich to annually disclose the income they’re reporting to the IRS and how much of that income they actually pay in taxes.

Eighty years ago, just like today, America’s rich were massively evading taxes. If wealthy taxpayers knew their tax returns would be open to public inspection, reformers argued, they would be far less audacious with their evading. Disclosure would also help lawmakers identify the tax loopholes that most needed plugging.

In 1934, progressives actually added a disclosure provision to the tax code. But the super rich counterattacked with a media blitz that tied disclosure to the infamous Lindbergh baby kidnapping. If all rich Americans had to disclose their incomes, the argument went, kidnappers would gain a wider pool of targets.

This PR juggernaut carried the day. Congress repealed the disclosure mandate. But the basic idea behind income tax disclosure remains as promising as ever. (more…)

A new report from the Institute for Policy Studies shows that the CEOs who make up the “Fix the Debt” campaign sit on massive retirement funds of their own while calling for the retirement programs that working families rely on to be cut as part of a deficit-reduction package. Furthermore, those same CEOs have been shortchanging pension funds for working families at the corporations they run.

The Fix the Debt campaign is made up of more than 90 corporate chief executive officers who are advocating for a deal to reduce the national deficit and debt by reducing earned benefit programs such as Social Security, Medicare and Medicaid. At the same time, they are advocating for massive corporate tax cuts.

In “A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts,” authors Sarah Anderson and Scott Klinger found that the 71 Fix the Debt CEOs who run public companies have average retirement assets of $9.1 million. Of those, 54 take part in their own company’s retirement programs, averaging more than $12 million in assets. That could translate into a pension check of $65,873 each month for life.  The average monthly check for Social Security recipients is $1,237. (more…)

With the election behind us, President Obama and the lame-duck Congress return to Washington to face a fiscal showdown, occasioned by automatic tax hikes and spending cuts scheduled to kick in after the first of the year. Most economists, including the nonpartisan Congressional Budget Office, agree that if nothing is done, this arbitrary, Washington-created “fiscal cliff,” as Federal Reserve chair Ben Bernanke dubbed it, will likely drive the economy back into recession.

It is probably already contributing to slower growth. The New York Times reports that manufacturers are delaying capital improvements and postponing hiring for fear that no deal will be made. More than a third of the nation’s school districts have reduced programs and hiring in anticipation. If there’s no deal, domestic agencies face an 8 percent cut across the board in fiscal year 2013.  Middle-class families will see an income tax hike of about $1,500, a cut in child tax credits by about $500 per kid, a cut in tuition tax credits by $700 a year, and a hike in the payroll tax of $1,000 a year. Lower-income families will suffer cuts in the earned-income tax credit. The result is renewed discussion of a “grand bargain” to avoid that self-destructive course.

But the “cliff,” with its misleading metaphor of an imminent, irreversible fall, has been misconstrued by the media. These changes are not irrevocable; it’s not as if they can’t be fixed after January 1 (more on this later). But in true shock doctrine fashion, the ersatz crisis is being used to demand changes that would otherwise be politically impossible: cuts in Social Security, Medicare and Medicaid, along with deep cuts in basic government services, combined with tax increases. Wall Street billionaire Pete Peterson has enlisted bankers and CEOs in a multimillion-dollar campaign spearheaded by the hysterical Cassandras of debt, Alan Simpson and Erskine Bowles, former co-chairs of President Obama’s deficit commission, to demand action now. Editorial opinion and much of the punditry, along with a claque of supposedly bipartisan or nonpartisan lobbying groups, have dutifully echoed the call. Gaggles of senatorial aides have been meeting to explore what a deal might look like.

In an initially off-the-record campaign interview in late October with The Des Moines Register, Obama indicated that he intended to offer Republicans a deal similar to the one he offered House Speaker John Boehner in the summer of 2011: meeting the Simpson-Bowles target of $4 trillion in deficit reductions over ten years, with a ratio of $2.50 in spending cuts for every $1 in new revenue as well as “working to reduce the costs of our health care programs.” Since the election, Boehner and Senate Republicans have indicated they would support an agreement that reduces deficits by cutting Medicare and Social Security in exchange for tax reform that lowers rates but raises more revenue through closing loopholes.

Virtually every aspect of this hysteria is wrong. The United States does not have a short-term deficit problem, and the fundamental long-term problem isn’t one of soaring debt; rather, it is the lack of a foundation for sustainable growth that includes working people. Without a political movement to achieve the latter, very little progress will be made on the former.

The grand bargain being discussed in Washington reflects an elite consensus far removed from what voters want. Americans want action on jobs, and most support the president’s call to raise taxes on the rich. Overwhelmingly, they want basic family security programs protected. Any deal that cuts Medicare and Social Security, slows growth and increases unemployment will look a lot more like a grand betrayal than a grand bargain. And virtually the entire organized base of the Democratic Party, from unions to civil rights and women’s groups, is mobilizing in opposition.

Austerity Bites

There are still more than 20 million people in need of full-time work. Mass unemployment guarantees stagnant or falling wages and sputtering growth. Long-term unemployment—40 percent of those out of work have been jobless for more than twenty-seven weeks—erodes skills, confidence and lives. The Federal Reserve, understanding the danger, has used monetary policy to keep interest rates low and pump money into the economy. Yet Americans are still strapped, given declining real wages, the collapse of the value of their homes and the rising cost of necessities, from gas to college education to healthcare. Companies are sitting on trillions in profits, waiting for demand to pick up for their products. The Fed can’t generate the growth we need through monetary policy alone. In this situation, the federal government should be acting to boost the economy.

Washington’s obsession with deficits is illogical for two reasons: first, there is no sign of accelerating inflation; interest rates are near record lows, as global investors seek shelter in US securities from economic turmoil abroad. We will never have a better opportunity to rebuild our decrepit infrastructure, so there’s no reason for Washington to focus on belt tightening now.

Second, austerity is, paradoxically, likely to undermine the stated goal of deficit reduction. Cutting spending and raising taxes in a weak economy destroys jobs and slows growth. The increased unemployment leads to declining tax revenue as well as increased demands on government services, all of which adds to the deficit. This is the famous “debt trap” recently experienced in much of Europe, where premature and harsh austerity drove many EU countries into recession. Spain, Portugal and Greece have piled up worse debt burdens as their economies collapsed. (more…)

At this point almost everyone has heard of Nate Silver, the New York Timespolling analyst who had all the pundits looking stupid on election night. Silver managed to call every state exactly right. He ignored the gibberish about momentum or voters’ moods and simply focused on the data given by the various polls taken in the final weeks of the campaign.

While Silver’s work has likely permanently transformed election coverage, it is interesting to think about a similar analysis being applied elsewhere — for example, the debate over the budget. Suppose that we had someone focused on actual data involved in the budget debate instead of the silly rhetoric coming from the Republicans and Democrats.

The first thing that a Nate Silver would likely point out in discussing the budget is that the large deficits of the last few years cannot be attributed either to extravagant social spending or to the Bush tax cuts. The reality that neither Republicans nor Democrats like to acknowledge is that deficits were relatively modest until the economy collapsed in 2008.

The data here is straightforward and not debatable. The Congressional Budget Office reports (Table 1-1) that the deficit in fiscal year 2007, the last full year before the downturn, was 1.2 percent of GDP. We can run deficits of 1.2 percent of GDP forever. At this level, the debt-to-GDP ratio was falling. Furthermore, the deficit was projected to remain in this neighborhood until 2012 when the expiration of the Bush tax cuts was expected to bring the government to a small surplus.

The reason that we got deficits of close to 10 percent of GDP in 2009 and 2010 and continuing large deficits through the present is that the economy collapsed. This led to a plunge in tax collections and increased spending on programs such as unemployment insurance and food stamps. There were no large unfunded increases in social spending since 2007, nor were there big permanent tax cuts. (more…)

As President Obama gets closer to making his deal with the Republicans on the budget, the most important thing to keep in mind is that the fiscal cliff is an artificially contrived trap. Were it not for the two Bush wars and the two Bush tax cuts and the House Republican games of brinksmanship with the routine extension of the debt ceiling, there would be no “fiscal cliff.”

Rather, there would be a normal, relatively short-term increase in the deficit resulting from a deep recession and the drop in government revenues that it produces. When the economy recovered, the deficit would return to sustainable levels. In the meantime, these deficits are necessary and useful to maintain public spending as a tonic to the economy.

In addition, there are two entirely extraneous questions that do not belong in this debate — whether Social Security requires any long-term adjustment to assure its solvency, and if so, what kind; and how to restrain the long-term growth in Medicare spending.

In fact, if we get can get back to full employment, there is no Social Security crisis, because Social Security is financed by taxes on payrolls. In the Clinton era, when we had full employment, the crisis kept receding. If we want a little extra insurance, we can lift the cap on income subject to payroll taxes.

Medicare spending is a long-term problem that requires major structural reforms. Reducing benefits or raising the eligibility age in the heat of an artificially contrived fiscal crisis is the wrong way to proceed. Obama’s Affordable Care Act will keep Medicare at roughly its present level of spending relative to GDP — too high, but not an imminent catastrophe.

The strategy of the right-wing has been to blur these several distinct issues into a single grand fiscal crisis, the better to reduce government spending and especially to cut Social Security and Medicare. The right-wing, in this case, is a two-headed beast. The Republican right-wing is mainly interested in defending tax cuts for the rich and reducing social spending generally, while the deficit hawks of the center-right want to achieve budget balance and weaken Social Security and Medicare. And since Social Security and Medicare are phenomenally popular, so much the better for the Republicans if they can trick the Democrats into sharing responsibility for the deed.

A further piece of mischief is the premise that we somehow need a 10-year budget deal that reduces the projected deficit by something like $4 to $5 trillion. We don’t. What we need is an economic recovery. If we get a recovery with something close to full employment, the deficit naturally comes down as revenues to and current levels of public spending are entirely sustainable — especially if we go back to the pre-Bush tax levels on the wealthy.

So if we limit the debate to the real subject at hand — namely how to avoid a massive fiscal contraction next year when all the Bush tax cuts expire, President Obama holds a very strong hand. He has made it clear that he will not tolerate extending the Bush tax cuts for the top 2 percent at a cost of cutting back valued government outlays for everyone else. But he does want to extend the lower tax rates for the bottom 98 percent. (more…)

Politics bring out people’s best and worst… and the deeply weird.

For example, the 2012 prize for “Stupidest Thing Said About Women” was in the bag for those two GOP senate candidates who flashed voters with gross displays of their masculine boorishness and ignorance on the topic of rape. But then, out of far right field, came Janis Lane to snatch the prize from the men. President of the Central Mississippi tea party, Ms. Lane blurted to a reporter that the worst change in American politics was letting women vote. “There is nothing worse than a bunch of mean, hateful women,” she explained. “They are diabolical… double-minded, you can never trust them.” Janis added that she always preferred to have a male boss.

Speaking of which, take Donnie Trump – please! On election night, he surpassed his own world record in the egomaniacal high jump by sending tweets complaining that Obama was being declared president, even though he’d lost the popular vote. “Revolution!” tweeted the twit – “Let’s fight like hell and stop this great and disgusting injustice.” Only… Obama had won the popular vote, leaving the Penthouse Revolutionary looking even more ridiculous than usual. (more…)

In two letters to Congress, small business owners and executives contend they’d be best served by increasing taxes on the rich and preserving social safety net programs.

The business owners and executives, members of non-partisan small business organizations, wrote Congress this month asking lawmakers to avoid cutting programs like Social Security and Medicare. In addition, they asked Congress to let expire the Bush-era tax cuts for the rich. The business groups are the American Sustainable Business Council, the Business for Shared Prosperity and the Main Street Alliance, which together include networks of more than 150,000 small businesses and 300,000 executives, owners and investors.

A letter from the American Sustainable Business Council and the Business for Shared Prosperity explains that the businessmen believe government programs like Social Security provide Americans with the financial stability they need to be able patronize small businesses.

“Huge tax cuts for the richest Americans have not trickled down to increase small- and medium-sized business investment, broad based consumer purchasing power or job creation,” reads the letter sent to Congress by the two small business organizations.

“As business owners, none of us hire more employees simply because someone gives us a tax cut.  We hire more employees when our customers demand more of what we have to sell.  When a teacher, firefighter or construction worker building public infrastructure loses his or her job, many of us also lose a customer,” the letter continues.

The small business men and women say they won’t be affected for the most part by permitting the Bush-era tax cuts for the wealthy to expire. According to the American Sustainable Business Council less than 3 percent of individual tax filers with business income earn enough to pay a higher rate. That is $200,000 for individuals or $250,000 for couples.  Many of those who do earn enough to be affected are not small business owners in the traditional sense but instead include Wall Street investors, lobbyists, and wealthy CEOs earning income advising other corporations. (more…)

Initially, we were nervous about making the trip to Sao Paulo, Brazil for a meeting with the Gerdau Workers World Council. We’d be 5,000 miles from home, without much idea of what to expect as representatives for unions in the U.S. and Canada.

But, as soon as we arrived, we saw that our counterparts were no different than the brothers and sisters at our own Locals: men and women who work for a living and want to do the best they can for their families. They were gracious, friendly, and proud of their work, just like we are.

It doesn’t matter where you’re from, what you look like, or what language you speak. Anyone who works for a living wants three basic things: First, we want to come home from work safe, in the same shape as when we left. Second, we want to be able to provide for our families, so that our kids can grow up just a little better than we did. And third, we want to be able to retire with dignity. We don’t expect to get rich or receive a handout, but we also know that we shouldn’t have to live near poverty after working our whole lives to make money for our companies.

Along with the Council meeting, we visited workers at a sister plant in Sorocaba. The company wouldn’t allow us in, but workers flooded to the gate to applaud and chant for solidarity. We also joined Brazilian unions in a huge protest against the cuts that brothers and sisters around the world are facing because of the financial crisis. (more…)